If I have a car loan, do I need full-coverage auto insurance?
I don't want to pay more for auto insurance than necessary. Will I have to shell out for full coverage for my financed car?
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Answered on Apr 08, 2021
Johnny Puckett is a freelance writer and automotive expert. He has contributed content to a number of some of the largest online publications, aftermarket automotive manufacturers’ sites, and automotive informational sites. His experience in the automotive and information fields informs his writing at Jerry. His automotive interests bleed into his free time, where he enjoys modifying his favorite cars and woodworking.
“Since the lender legally owns a financed vehicle, those who have a car loan must typically have full-coverage auto insurance. This protects the lender’s investment in the event of an accident.
Full-coverage insurance generally comprises comprehensive and collision coverages, as well as liability coverage, which is usually state-mandated. You may also want to consider buying gap insurance, which will cover the difference between what your car is currently worth and the amount you still owe on it in the event that the car is totaled. “
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